It seems that the Europeans, who are angry, angry, angry! at Vladimir Vladimirovich Putin aren’t angry enough to do without Russian natural gas. From The Washington Post:

Europe accepts Putin’s demands on gas payments to avoid more shut-offs

By Chico Harlan and Stefano Pitrelli | Tuesday, May 24, 2022 | 1:22 PM EDT

ROME — European energy companies appear to have bent to Russian President Vladimir Putin’s demand that they purchase natural gas using an elaborate new payment system, a concession that avoids more gas shut-offs and also gives Putin a public relations victory while continuing to fund his war effort in Ukraine.

The system, which involves the creation of two accounts at Gazprombank, enables Europe to say it is technically paying for natural gas in euros, while Russia can say it is receiving payment in rubles — a requirement Putin imposed on “unfriendly” nations.

Putin’s insistence on rubles may be more about forcing European countries to scramble at his behest than about shoring up his country’s currency, some economists and energy experts suspect. European Union countries have been touchy about the notion they might violate their sanctions on Russia, and questions about the arrangement tested European unity, leading to weeks of chaos and contradictory guidance from Brussels. It also got countries talking about how much they still need Russian gas, even as they debate a Russian oil embargo.

Well, of course they need Russian gas! And they’ll continue to need Russian gas, especially as worsening economic conditions force reductions in investments on alternative energy sources. In the end, Mr Putin has them in a place in which their hearts and minds will follow.

But that also means sending money to Russia even as they condemn the Kremlin-launched war, sanction oligarchs and supply weapons to Ukraine.

Russia had already used strict capital controls and a massive interest rate hike to stabilize the ruble. With Europe now signaling that it will use the payment system as bills come due this week, the currency is strengthening all the more.

The system set up is a face-saving one, but it really doesn’t save a lot of face, not to anyone who has even a remote understanding of what is being done. The Europeans will pay their bills in euros, not the rubles President Putin had demanded, and then a special account at Газпромбанк will take the euros and convert them to rubles.

On February 24, 2022, the White House announced severe sanctions against Russian banks:

Today, the United States, along with Allies and partners, is imposing severe and immediate economic costs on Russia in response to Putin’s war of choice against Ukraine. Today’s actions include sweeping financial sanctions and stringent export controls that will have profound impact on Russia’s economy, financial system, and access to cutting-edge technology. The sanctions measures impose severe costs on Russia’s largest financial institutions and will further isolate Russia from the global financial system. With today’s financial sanctions, we have now targeted all ten of Russia’s largest financial institutions, including the imposition of full blocking and correspondent and payable-through account sanctions, and debt and equity restrictions, on institutions holding nearly 80% of Russian banking sector assets. The unprecedented export control measures will cut off more than half of Russia’s high-tech imports, restricting Russia’s access to vital technological inputs, atrophying its industrial base, and undercutting Russia’s strategic ambitions to exert influence on the world stage. The impact of these measures will be significantly magnified due to historical multilateral cooperation with a wide range of Allies and partners who are mirroring our actions, inhibiting Putin’s ambition to diversify Russia’s brittle, one-dimensional economy. The scale of Putin’s aggression and the threat it poses to the international order require a resolute response, and we will continue imposing severe costs if he does not change course.

It appears, however, that “full blocking and correspondent and payable-through account sanctions” are somehow less important when it comes to Europe’s need for natural gas!